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More Wins To Ripple, Court Denies SEC Access To Legal Advice

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Ripple has scored another win in its ongoing legal battle against the United States Securities and Exchange Commission as the court has denied the SEC access to Ripple’s legal advice.

Magistrate Judge Sarah Netburn of the District Court for the Southern District of New York ruled Sunday to deny the SEC’s motion to compel Ripple to produce memos discussing XRP sales with the firm’s lawyers.

According to the SEC, Ripple could have been aware that XRP could be a security from its legal advisors before moving forward with its token sale back in 2013. The SEC filed a motion on May 7 to compel Ripple to produce all communications discussing any legal advice Ripple sought or received as to whether its offers and sales of XRP would be subject to federal securities laws.

In the latest ruling, Netburn referred to the attorney-client privilege that is meant to “encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” The judge noted that Ripple has not waived its attorney-client privilege despite defendants being able to waive it in certain circumstances.

The ruling also pays special attention to the rule of fair notice, which requires the courts to construe ambiguous criminal statutes in favor of the defendant. In asserting this defense, Ripple claims that the SEC failed to provide market participants with fair notice that the regulator considered XRP a security.

“In support, it cites to the SEC’s eight-year delay in pursuing enforcement action against Ripple for its alleged securities violations — even after XRP was listed on over 200 cryptocurrency exchanges, billions of dollars of XRP sales transactions had taken place, and Ripple had entered a settlement with the U.S. Department of Justice and FinCEN that described XRP as a ‘convertible virtual currency,’” Netburn wrote.

The judge noted that the SEC may renew its motion application if Ripple “raises its beliefs or relies upon its privileged communications in support of its fair notice defense.”

The latest ruling is yet another milestone in the SEC’s battle against Ripple after the regulator filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse and executive chairman Chris Larsen in December 2020, alleging that XRP was a $1.3-billion unregistered securities offering. Ripple has managed to achieve a series of legal victories, including winning access to internal SEC discussion history regarding cryptocurrencies in April. The court also denied the SEC the ability to disclose the financial records of Garlinghouse and Larsen.

Last week, Garlinghouse confirmed Ripple’s plans to go public after the firm resolves its case with the SEC, stating that the likelihood of this scenario was “very high at some point.”

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Bitcoin

Bitcoin ‘Whales Are Re-Entering As Risk Appetite Returns’, Says Stack Funds Research

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On Wednesday, Lennard Neo, Head Of Research at Stack Funds, a Singapore-based crypto-focused fund management company, explained why they believe that “Bitcoin is very close to the bottom.

His comments about Bitcoin were delivered in a research note (titled: “Strong support observed as Bitcoins get scooped up at $30,000”), which was published yesterday.

The research analyst wrote:

“We have observed a meltdown in long liquidations (7D MA) over the past few weeks. This coupled with the Leverage ratio (grey line) falling to a 2-year low after dipping below that of March 2020 levels, provides evidence that traders are more cautious in taking positions.

“Inflows for Bitcoin have skewed to spot accumulation as opposed to speculation, as investors match their expectations towards a longer-term horizon – signaling less propensity to sell.

“In the face of the recent sell-off, we also see significant support levels around the $30,000 handle, with substantial bids coming in to fill up the offers. The strength comes on the back of Microstrategy accumulating more Bitcoins, and we have noticed that Whales are also re-entering the market as risk appetite returns. Short squeeze hunters have also begun waning away in the near term as markets continue to establish ground on a consolidation phase.“

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Canaan Begins Its Own Bitcoin Mining Operations in Kazakhstan

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Bitcoin mining machines manufacturer Canaan has started mining bitcoin in Kazakhstan, following the crackdown on bitcoin mining in China.

Canaan said its AvalonMiner units are already in operation in Kazakhstan. When asked how many units and of which model has been deployed, a Canaan spokesperson declined to comment on specifics but said “a first batch of small-scale mining machines” have been deployed to start with.

Canaan foresees “a gradual ramp-up to full operational functionality over time,” the spokesperson added. The company has partnered with local mining companies in Kazakhstan for the initiative, they said.

China-based Canaan has been preparing to launch a crypto mining business in Kazakhstan for some time now. Earlier this month, the Nasdaq-listed company opened its first overseas after-sales service center in Kazakhstan as its global sales continue to increase.

Kazakhstan appears to be growing in popularity for bitcoin mining after China moved to shut down local bitcoin mining farms last month. Kazakhstan is close to China and has one of the cheapest electricity rates in the world.

Earlier this week, China-based BIT Mining, formerly known as 500.com, also shipped some of its bitcoin mining equipment to Kazakhstan. The company is set to send more machines to the country next month.

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Cryptocurrency

Andreessen Horowitz Officially Launches New $2.2B Crypto Venture Fund

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Andreessen Horowitz /(a16z)- Investors King

Andreessen Horowitz (a16z) — prominent venture capital fund led by Ben Horowitz and Marc Andreessen — announced Thursday the close of its third crypto venture fund, a $2.2 billion fund that the firm says is the largest of its kind.

The new “Crypto Fund III” will be co-led by Chris Dixon and Katie Haun.

“The largest crypto fund ever raised to date, Crypto Fund III is a validating moment for the ecosystem and another sign that crypto becoming an ever more mainstream part of our financial infrastructure,” the firm said in a press release.

Rumors of Andreessen Horowitz (also known as a16z) raising a mega-fund have appeared in various reports in recent months. The Financial Times reported in April that the California-based investment firm would be raising $1 billion for a crypto fund. In late May, tech blogger Eric Newcomer wrote that the firm was raising $2 billion.

A source familiar with the raise now told The Block that interest came mostly from limited partners in the firm’s previous crypto funds, which have seen large returns. a16z netted more than $440 million from selling Coinbase stock soon after the exchange made its public markets debut on Nasdaq, according to CoinDesk.

a16z’s mandate in crypto has been broad, ranging from decentralized finance (DeFi) to bitcoin applications to so-called Web 3, or a decentralized version of the internet. The firm’s portfolio includes Dapper Labs, Celo, Uniswap, and Near.

“This fund allows us to find the next generation of visionary crypto founders, and invest in the most exciting areas of crypto,” Dixon and Haun wrote in a blog post. “We invest in all stages, from early seed-stage projects to fully developed later-stage networks.”

In addition to securing more than $2 billion to invest in crypto, a16z’s crypto business has been hiring aggressively. It has made a number of key hires including Anthony Albanese, who joined the firm last year from the New York Stock Exchange. Albanese is now being promoted to chief operating officer of a16z crypto.

The firm also hired Bill Hinman, a former director at the Securities and Exchange Commission, who once said ether (ETH) is not a security, and Rachael Horowitz, a veteran Silicon Vally communications strategist who previously was the top communicator at Coinbase, also recently joined. Horowitz has also held positions at Twitter, Google, and Facebook.

Additional new hires include policymaker Tomicah Tilleman, who is joining the firm as global head of policy after serving as a senior advisor to President Joe Biden.

“As with any new computing movement, crypto has endured a variety of challenges and misconceptions,” Dixon and Haun said. “That’s why we are also bringing together heavy-hitters across several functions to help translate “crypto” to the mainstream.”

The announcement of Crypto Fund III follows a flurry of recent activity in crypto venture investing. Despite the slump in coin prices, investors have been raising large sums of cash to pour into new crypto startups.

Framework Ventures recently announced a $100 million new fund to invest in DeFi. Blockchain Capital, meanwhile, recently announced a new $300 million fund with backing from tech giants PayPal and Visa.

Data from The Block shows investors poured more than $8.8 billion into startups during 2021, compared with 3.07 billion in all of 2020.

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